Daley: Taxpayer risk from Olympics is limited

LAUSANNE, Switzerland -- Mayor Richard M. Daley insisted today that Chicago taxpayers are on the Olympic hook for only the $500 million guaranteed by the City Council.

"We go to $500 million and that's it," Daley said in an interview today with the Tribune.

But Daley's assertion is at odds with language in a host city contract the mayor plans to sign, obligating the city to full financial responsibility for a Chicago 2016 Summer Games. The contract requires the city and the Olympic organizing committee to assume unlimited financial liability for the "planning, organization and staging of the Games."

Chicago 2016 bid leader Patrick Ryan, as well as a number of outside observers, have acknowledged the city would be on the hook if losses exceeded guarantees and insurance policies. This would only happen "if everyone was so inept that we go over," Ryan said Wednesday.

Daley declined several times today to address what would happen under the contract in a worst-case scenario -- severe cost-overruns or a catastrophic event, for example, that could leave taxpayers responsible for hundreds of millions of dollars or even more.

"If everyone goes bankrupt in the world, I don't know what happens," Daley said. "The one thing I know is it is only $500 million to Chicago taxpayers.

"Here is what it is," Daley said. "Only $500 million we agreed to. This other thing is like an insurance policy."

Daley said he would provide the City Council with evidence of a binding commitment for the policy before leaving for the host city election Oct. 2 in Copenhagen. All four bid cities are to sign the contract a day before the IOC vote.

He compared the issue to the way the city handles monetary judgments against it.

"This other thing [the new insurance policy] is like life insurance," Daley said. "We get judgments against the city on tort reform. We appropriate [money] and for everything above it there is an insurance policy.

"This is not an appropriation of any more money. It is strictly an insurance policy."

Chicago 2016 now has guarantees worth more than $2 billion, although about half is to come from insurance policies for which it has yet to get binding commitments.